Fort Share Broking's multibaggers: Everest Ind, Jyothy Labs

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Fort Share Broking's multibaggers: Everest Ind, Jyothy Labs

Aashish Tater, head of research at Fort Share Broking shares his multibagger ideas on CNBC-TV18. He analyses Everest Industries and Jyothy Laboratories and his targets for both these stocks. He also gives his view on the dollar rupee dynamics.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Everest Ind BSE | NSE 30/05/12 Are Mutual Funds betting on Everest Ind? Other Stocks in this news Jyothy Laboratories | Sahyadri Industries | Hyderabad Industries |

Aashish Tater, head of research at Fort Share Broking shares his multibagger ideas on CNBC-TV18. He analyses Everest Industries and Jyothy Laboratories and his targets for both these stocks. He also gives his view on the dollar rupee dynamics.

Dollar Rupee

On December 20, we said that rupee-dollar equation is not favourable and is over speculated by at least Rs 3.50-4 and it corrected. Now the system price that we were pushing for has corrected. The rupee-dollar equation has good support around the 48.85 mark. Incidentally we are very close to the 200 DMA and if there is a reversal in terms of outflow from FII perspective, rupee can again go to that 51 level and there will be a huge trend reversal if 4,850 is taken on downside. We feel that could be a very good chance for the first one, then the latter.

Everest Industries

Everest Industries, they have been pushing stories like Sahyadri Industries , Everest Industries and Hyderabad Industries because we feel these are stocks which did not have any business specific problems except for the fact that there was over capacity in the system for a particular period of time where the weaker hands have actually given their factories on lease to the strong players. That's why the numbers have again improved on higher side.

We maintain that for this fiscal the company would do Rs 33 of EPS - that was on my last interview sometime in April 2011. We had a two year target of Rs 264 on the stock. We have not changed our view. When we had renewed interest into this particular space, the stock was hovering around at Rs 110. Sahyadri was hovering around the Rs 35-40 mark, Hyderabad was nearer to Rs 270-280. The stock has given a very fast run up, almost 30% from the lows. So there might be some cool off but this is one stock which should be a portfolio bet.

From the next fiscal perspective, we have a revenue target of close to Rs 988-1,020 crore on the stock. A company which has reduced its financial risk by paying off its debt, the interest cost has also gone significantly down YoY from the last two years perspective. A very safe bet into the space with decent dividend yield and a chance that the stock would in good times again go and test a median of close to eight multiples.

The stock has done an EPS of Rs 33 for this fiscal and we expect Rs 37-38 for next fiscal. So on 7-8 PE multiples the stock should go and test that Rs 260-265 which is roughly 60-70% upside from the next eight-10 months perspective.

Jyothy Laboratories

For the last one year we have been pushing Amar Remedies. It's a one-stop shop where there are dental products than anything else. We have a renewed interest in Jyothy Labs. In 2010 we were buyers of Jyothy Labs, 2011 we did not even look at it, we booked out of it. Now again we have a renewed interest into it because it is not a one-stop-shop of detergents but because of its acquisition of Henkel India, it has got a product portfolio - Neem, Margo, Fa - all these products are well known.

The company needs an operational expansion which will take some time. Before that the stock has already been punished by the market. Think from a two-two-and-half year's perspective. The company is sitting on a market cap of close to Rs 1,300 crore at current market price with debt and taking an enterprise value of less than Rs 2,000 crore. The company in the next two-and-half years could do at least revenue of over Rs 1,200 crore, almost a 100% upside.

If I take a call that the market was paying on a standalone basis to this particular share Rs 270, with the product portfolio and a larger brand in its portfolio, the stock could again go and test those Rs 270-280 levels in less than two years. The stock is right now at Rs 160. A defensive bet into FMCG sector with larger product portfolio and a downside risk limited to that Rs 140-150. If you see, the promoters have actually given disclaimers of buying the stock in December when the stock was hovering around that Rs 140-150 odd mark.

We feel that on the downside with patience if you hold a quantity from a longer-term perspective, you would make at least 30% return YoY from next two years perspective. A very safe bet, good brand portfolio and with operational performance again on the company's side because this quarter was a good quarter but we would still wait and watch for the next two quarters. If the company actually does that what we are expecting, the stock can even cross the Rs 300 mark this time than testing the Rs 270 odd high of 2011.